Chicago school layoffs blamed on pension crisis

Published: Saturday, July 20, 2013 5:30 a.m. CDT

Caption

(AP photo)

Jesse Sharkey, vice president of the Chicago Teachers Union, responds to a question Friday about the latest layoffs by the Chicago Public Schools of union employees during a news conference in Chicago.

By SARA BURNETT -
The Associated Press

CHICAGO – Chicago Public Schools and city leaders say the state’s failure to enact pension reform is to blame for the district laying off more than 2,100 employees – a cut that one legislator described Friday as “more dramatic than anything the state has seen” during the long-festering crisis.

But at a Chicago Teachers Union news conference Friday, affected teachers and parents pointed to Mayor Rahm Emanuel and Chicago Public Schools for failing to find money for education.

Emanuel called the layoffs – which include 1,036 teachers – “yet another painful reminder to Springfield that we need immediate pension relief.”

“The pension crisis is no longer around the corner,” he said. “It has arrived at our schools.”

The Legislature has been unable to reach a deal to reduce the unfunded pension liability in its five retirement systems, which has a nearly $100 billion shortfall. Lawmakers also rejected a plan to let CPS make smaller-than-scheduled pension contributions – a proposal that critics ripped as the same kind of delayed payment plan that got the state and the nation’s third-largest school district into its current pension crisis. And while a legislative committee is still tackling the state pension problem, a fix for CPS doesn’t appear to be coming soon.

The cuts CPS announced Thursday are on top of about 850 layoffs announced earlier this year, after the board of education voted to close 50 schools or programs in an attempt to “right-size” the district. Some of the 2,113 positions cut in this latest round also were in schools that were closed.

Teachers and parents held back tears Friday as they railed angrily at Emanuel and CPS administration. They said city has been able to find money for other projects, such as a new basketball stadium for DePaul University and renovating a downtown river walk.

Union vice president Jesse Sharkey also said it’s unfair for the mayor and CPS to blame retired teachers – who made their required pension contributions and aren’t eligible for Social Security – when the district skipped or shorted its pension payment for more than a decade.

“We think that’s hypocrisy,” Sharkey said.

Sharkey and others said the cuts will lead to larger class sizes, less art and music instruction and less individual attention for students with special needs. CPS hasn’t said what the specific impact on classroom size or offerings will be.

CPS and the Chicago Teachers Union tried for months to reach an agreement on how to reduce the district’s pension costs and get it approved by the Legislature. But Sharkey said the talks fell apart in late May because the union wouldn’t agree to cuts unless CPS and legislators also agreed to seek new sources of revenue, such as eliminating special taxing districts that reduce the amount of property tax money available to schools.

Without a deal, lawmakers attempted in the final days of the legislative session to decrease the amount of money CPS would be required to pay into its pension fund – often referred to as a pension “holiday.”

Without it, CPS’ annual pension payment was scheduled to increase from $196 million last year to $600 million. The legislation sponsored by Rep. Elaine Nekritz, a Northbrook Democrat, would have allowed CPS to pay just $350 million this year and $500 million next year.

“They were facing a cliff more dramatic than anything the state has seen,” Nekritz said Friday. “I’m no fan of pension holidays, but if I have to balance a pension holiday with kids not getting educated, I choose to make sure we can educate kids.”

But the measure failed in the House, where opponents criticized it as a bad idea being rammed through at the last minute. Gov. Pat Quinn also issued a statement on the last day of the legislative session saying he would veto the bill if lawmakers sent it to his desk without first approving a plan to address the state’s own pension debt.

A bipartisan legislative committee is now trying to reach a compromise on the state’s pension problems. Nekritz, the committee’s vice chairwoman, said Friday the committee hasn’t yet discussed whether a CPS pension deal would be part of whatever recommendations the committee makes.

The failure to approve the pension holiday meant CPS was on the hook for an additional $404 million pension payment this year – an expense Emanuel and CPS say is part of an overall budget deficit of $1 billion.

The layoffs announced Thursday were at least partly the result of that shortfall, CPS and the mayor’s office said. CPS said teachers will be able to reapply for other jobs in the district, and that historically more than 60 percent of displaced teachers have found positions elsewhere within CPS. They also noted the CPS central office has cut its own spending by nearly $600 million since 2011 in an effort to avoid cuts to classrooms.

Several federal lawsuits have been filed on behalf of parents to try to stop the previously announced school closings, which critics say disproportionately affect black children. On Friday, opponents of the layoffs vowed to fight those as well.